The Sunday Times May 29, 2022 3
You do
realise I am
going to
smack you
one day
8,023%
Return to investors under
Cowgill’s reign£421m
JD Sports’ pre-tax profits
last year£3.2bn
The value of the Rubins’
stake in JD Sportsdo this. It’s better to agree severance
packages in advance when they join —
much less acrimonious, too.
10) We should separate in our minds
rewards for work and rewards for taking
risks. Some in the financial sector are
rewarded hugely for taking risks with
other people’s money, with little
downside for themselves if things go
wrong.
However, most of the world’s fortunes
were made by entrepreneurs taking
huge risks — putting their homes on the
line, making big personal sacrifices,
working all hours and showing dogged,
pioneering determination. They deserve
to make it big if their life’s gamble pays
off (as long as they pay any taxes due).
But massive rewards for corporate
executives, especially if they are not
linked to risk or performance, is
something else.
11) The average salary of FTSE 100 chief
executives in 2020 was £2.7 million —please have lots of winners. The
“suggestion of the year” that earns the
lucky recipient a car they can’t drive
exemplifies the wisdom of doing
otherwise. And having one big winner
can cause resentment among others.
9) It makes my blood boil when
executives are rewarded for failure when
they leave their jobs. It shouldn’t even be
allowed, in my opinion, so please don’tReward people well – especially if you hit the jackpot
It makes my blood
boil when bosses
are rewarded for
failure on leaving
5) Sometimes, using an extra reward for
length of service or loyalty is
appropriate and means a lot to the
recipient. This could be as simple as
giving them more days’ allowance in the
holiday home you still decided to buy, or
maybe a company-funded jolly for those
serving five years or more.
6) Rewards might be linked to the
profitability of the company — a thank-
you “extra”, if you like. The John Lewis
bonus is a great example. But this can be
awkward if you have a bad year (or
several) and the money has grown to be
“expected”. If a bonus becomes the
norm, then people factor it into their
budget — that’s only natural.
7) I do think the people who can have a
big effect on profits deserve a bigger
percentage of the improvement they
generate, but this must come out of their
package, by which I mean a lower basic
salary if there is a big upside.
8) If you are running a competition,T
oday I am going to talk about an
emotive, often avoided and
very important subject:
rewards. Where do I start?
As dear old Adam Smith said
in The Wealth of Nations 250
years ago: “It is not from the
benevolence of the butcher, the
brewer or the baker that we expect to eat
our dinner, but from their regard to their
own interest.”
While this might sound pretty
mercenary to the modern ear, most
people go to work to earn their living.
Household bills are ramping up and the
pressure to enjoy life to the full — which
typically means being able to consume
the experiences and products that the
media assures us will lead to happiness —
is growing. This costs money.
As bosses, how should we go about
rewarding our hard-working people?
1) Everybody, as much as humanly
possible, should be paid equally if doingthe same job. This obviously includes
women and men, people of different
races and all adults over 18. If the jobs
aren’t exactly identical, don’t split hairs.
2) Everybody should earn the real living
wage for doing a 40-hour week, ideally
with the opportunity to earn more —
through overtime, for example.
3) Performance bonuses are good for
businesses and workers alike — as long as
there is a base that they can’t fall below.
We call this a TGM, or total guaranteed
minimum. So if commission is involved,
it is fine to pay it as long as staff don’t
starve when they have a quiet week —
remember to pay average commission
for holidays and sickness, too.
4) It’s no good giving perks to staff and
then taking it out of their wages, because
they will simply ask for the cash instead.
Always make it clear and demonstrate
that the holiday home you have just
bought for them to enjoy free of charge
isn’t going to affect their take-home pay.Julian Richer Sound Advice
about 117 times what someone on the
current real living wage would have
earned — a much higher multiple than in
Scandinavia or Japan. Is this fair?
12) Non-financial rewards are also very
important. Don’t ever underestimate the
value of saying “well done” and “thank
you” to your colleagues.
Other benefits — such as subsidised
healthcare and gym membership, longer
paid holidays reflecting length of
service, and paid sabbaticals — all have a
value, too. They confirm to staff that you
care about them.
13) When our employee ownership trust
purchased 60 per cent of the business
from me, I gave £1,000 to every
employee for each year of their service,
costing me a tad under £4 million. So,
the most important tip: if and when you
have a windfall at work, don’t forget the
troops who got you there.
Julian Richer is founder and managing
director of Richer SoundsGERARDO JACONELLIThe Co-op’s passionate
members were out in force at
its stormy annual meeting in
Manchester last week. One
chastised the board for
selling the site of the Bee
Gees’ first UK gig to a housing
developer. Another
complained that the sign
outside the Co-op in
Charlton, southeast London,
was now a dull grey. “Let’s get
back to the blue!” he cried.
Underneath the trivial
gripes lay serious concerns
for new chief executive
Shirine Khoury-Haq.
The supply chain crisis and
the messy implementation of
a new software system have
combined to hammer the Co-
op’s profits and drain its cash
reserves. On top of that, the
clumsy succession process
that installed Khoury-Haq,
has caused ructions at the top
and could lead to the
departure of highly regarded
food boss Jo Whitfield.
Under the leadership of
the popular outgoing chief
executive Steve Murrells, who
advised Marcus Rashford on
his free school meals
campaign, the Co-op has
enjoyed a period of harmony
and stability after the dark
days of the “Crystal
Methodist” drug scandal and
the near implosion of its bank
almost a decade ago. Now,
concerns are mounting that
the mutual is sailing into
choppy waters once more.
“I think we’re in trouble.
The trading position is
awful,” said Ian Hewitt, an
agitated member who has
been on the board of various
regional co-operatives.
The Co-op is the largest
organisation of its kind,Trouble stalks Co-op a decade
after Crystal Methodist crisis
Appointment of
chief executive
causes ructions in
mutual’s top ranks
her children prepare for
exams. Murrells agreed to run
the food business until she
returned. Then, six weeks
later, the Co-op announced
Murrells would leave after the
AGM and be replaced on an
interim basis by finance
director Khoury-Haq.
The change was set in
motion when Murrells told
Leighton he did not want to
commit to another five years.
The problem was that
Murrells had told Whitfield
weeks earlier he intended to
stay. Whitfield, who coveted
the top job, was said to have
felt blindsided by Khoury-
Haq's appointment and is
expected to leave. “She was
livid,” one source said.
Murrells, it can also be
revealed, entered into a
relationship with a
subordinate in the Co-op’s
marketing department. The
relationship, which was
disclosed to the board more
than six months ago, is
understood not to have
breached any rules or been a
factor in Murrells’ departure
Leighton said Murrells had
made an “enormous
contribution” to the group
and Khoury-Haq had
“excellentaccounting for 85 per cent of
all co-operative food trade in
the UK. Set up in 1844 by
wholesalers in northwest
England, it is democratically
run and owned by its
4.3 million members, whose
concerns are communicated
to the board through a
national members council.
Profits are either reinvested
in the business, paid out to
members or used to fund
community causes.
Former Methodist minister
Paul Flowers became the face
of the mutual’s crisis when a
£1.5 billion hole was found in
its bank’s accounts nine years
ago. In a newspaper expose
the bank’s former chairman —
aka the “Crystal Methodist”
was filmed counting out a
wad of £20 notes to buy Class
A drugs. In order to survive,
the Co-op sold off its farms
and pharmacies, while the
bank was taken over by
American hedge funds.
Euan Sutherland, now
chief executive of Saga, lasted
just ten months at the helm
before branding the mutual
ungovernable and quitting in- Richard Pennycook, his
replacement, was widely
credited with restoring order
during his three-and-a-half-
year tenure. Allan Leighton
became chairman in 2015;
when he appointed Murrells
to succeed Pennycook, he
called it a “classic piece of
succession”. The latest
handover looks anything
but.
In February, the Co-op
announced that food boss
Whitfield would take a four-
month career break
from May to help
Sam Chambers
and Laith Al-Khalafleadership skills and deep
operational experience”.
Today, 80 per cent of the
Co-op’s operating profits
come from food with the rest
generated in funeral care,
wholesaling, legal services
and insurance. Last year, the
mutual eked out £100 million
of operating profit on sales of
£11.2 billion. Efforts to build
inventory to weather the
supply chain crisis added to
an almost £500 million fall in
net cash from operations,
which was only £178 million.
The Co-op, which was late
into e-commerce, is
understood to have spent
about £200 million on a new
software system, which was
crucial for its move into home
delivery and click and collect,
but the transition was testing,
compounding existing stock
issues caused by labour
shortages in the supply chain.
During a boom for larger
rivals, the Co-op’s like-for-like
sales were only 3.3 per cent
higher last year than pre-
pandemic levels. Now the
squeeze on household
budgets and soaring costs are
putting the entire sector
under pressure.
Khoury-Haq, a former
Lloyds Bank executive with
little retail experience before
joining the Co-op three years
ago, plans to slash £50 million
of costs scaling back non-
essential technology projects,
using fewer consultants and
cutting systems expenditure.
Leighton said the Co-Op
was now outperforming
competitors and its market
share was back to pre-
pandemic levels, but Khoury-
Haq, whose position is set to
be made permanent, warned
that the mutual economically
faces even more challenges
than last year.
Despite the discontent of
some members — who feel
increasingly marginalised —
all of the Co-op’s directors
were easily re-elected at the
AGM. As the outlook darkens,
though, their objections are
only likely to grow louder.and Khoury-Haq had
“excellentd with restoring order
his three-and-a-half-
ure. Allan Leighton
chairman in 2015;
e appointed Murrells
ed Pennycook, he
a “classic piece of
on”. The latest
er looks anythingbruary, the Co-op
ced that food boss
d would take a four-
areer break
ay to helpThe
appointment
of Shirine
Khoury-Haq
caused
ructions at
the top of
the Co-opThe US investor that has been
agitating for change at bus
and trains operator First
Group said a £1.2 billion
takeover approach last week
vindicated its activism.
Coast Capital started
pushing for First to break up
its sprawling business three
years ago in order to make it
easier to manage and value.
After meeting resistance from
the board, the company
eventually did sell its US
school bus and Greyhound
businesses for £3.3 billion.
Last week, it announced it
had received a takeover offer
from private equity group
I Squared and said it was
considering its options.
The offer values First at
118p a share plus a further
45.6p depending on extra
cash the group could still
receive from the sale of the
US businesses. Coast, which
currently holds a little over 3
per cent of the business, took
its stake from 10 per cent to 15
per cent during the Covid
crisis when the shares wereActivist welcomes
£1bn First Group bid
just 30p. Chad Tappendorf,
partner of Coast Capital, said:
“With the stock hitting a five-
year high on Friday, we are
happy to see that the path we
laid out for First Group three
years ago proved to be the
right one for shareholders.”
First is the latest in a line of
public transport takeover
events this year, following
bids for Stagecoach in the UK
and Nobina in Scandinavia.
Tappendorf said low
valuations, recovering
numbers of passengers and
demand among investors for
environmentally friendly
assets meant more would
follow.
He said while First had
urged investors not to act on
the I Squared offer yet, he
had “no doubt” the company
would be sold this year.
While Coast had pushed
for the US business to be sold,
it then criticised the board for
doing the disposal in the
height of the Covid lockdown
when valuations were at rock
bottom.Interview, page 6Jim ArmitageOpen banking platform
Trustly is defying the tech
sector gloom by expanding in
the UK with the purchase of
rival Ecospend.
Trustly, which allows users
to transfer money directly to
each other, said the
acquisition would set it on a
path to becoming a market
leader in the UK. The
companies declined to
disclose the terms of the deal.
Last April, with tech stocks
still riding high, Sweden-
based Trustly revealed plans
for a $9 billion (£7.1 billion)
float in Stockholm only to
shelve them three weeks later
when regulators raised
concerns about its lack of due
diligence. Since then,
valuations of financial
technology, or fintech, stocks
have plunged in an aggressive
sell-off of tech companies.
Klarna, another Swedish
fintech darling, said last week
that it would cut 700 jobs —
10 per cent of its workforce —
amid slower consumer
spending and reports that itsTech giant swoops
on UK banking rival
valuation could fall by 30 per
cent at its next fundraise.
Ecospend, founded by
Metin Erkman in 2017, won
the government’s first open
banking contract last year
when it was selected to
provide services to HMRC.
The company has processed
more than £5 billion of
payments over the past year.
Open banking was born
out of a Competition &
Markets Authority
investigation into retail
banking in 2016. It requires
the big banks to share data
about customers with the aim
of making it easier for them to
shop around for banking
services, which are
dominated by the “big four”
of Lloyds Banking Group,
HSBC, Barclays and NatWest.
It has spawned a wave of
fintech start-ups, but there is
controversy over the running
of The Open Banking
Implementation Entity, the
body set up to oversee open
banking.Buy now, get caught in
recession later, page 4Sam Chamberstiny and responsibility which comes with
being a FTSE 100 company.” Last year, JD
reported pre-tax profits of £421 million
on sales of £6.2 billion.
So, what does a post-Cowgill future
hold for JD? He leaves behind a goliath of
the sports retail industry whose interna-
tional success has, so far, bucked the
trend of British retail humiliations over-
seas. But recently, the City has begun to
have a few wobbles about the firm that
calls itself the King of Trainers.
Nike and Adidas have been cutting off
supply of their most desirable products
to retailers to funnel more of their tens of
billions of pounds of annual sales
through their own stores and websites. JD
had been seen as untouchable, but an
announcement by its American rival Foot
Locker in February that Nike would
restrict supplies has spooked the City.
More bad news could be on the way
closer to home, too. The CMA is still
investigating JD Sports over possible
breaches of competition law in relation to
the sale of Leicester City FC merchandise
and Rangers FC football shirts.A
fter two decades of 12-hour days
and six-day weeks an empty diary
will undoubtedly be an alien expe-
rience for Cowgill. He did, though,
take advantage of his clear sched-
ule last week to join his pals on the golfing
trip he was due to miss in Spain.
Cowgill’s defenestration continues an
exodus of colourful high street charac-
ters. Sports Direct founder Mike Ashley
has stepped back from the limelight after
finally realising his outlandish antics
were tarnishing the retailer’s brand. Ray
Kelvin, the founder of Ted Baker, had to
resign after a forced hugging scandal and
Sir Philip Green, who revelled more than
anyone in the media spotlight, seldom set
foot in the country after the BHS scandal.
The regular jousts between Cowgill
and this newspaper over the years have
generally been good natured affairs.
After one particularly unwelcome
inquiry, though, the King of trainers
appeared to finally have lost his rag.
“You do realise I am going to smack
you one day,” he said gruffly, before drop-
ping the facade and breaking into a
throaty chuckle. “Only kidding.”Agenda, page 9John Wardle and David
Makin started their JD Sports
empire in a single shop in the
Pennines in 1981, peddling
the gear they wore on the
terraces at Manchester City.
It was standard fare for
the “Casuals” tribe; young
men who would spend their
wages on pricey brands
such as Sergio Tacchini,
Ellesse and Lacoste.
When Peter Cowgill took
the helm in 2004, he stuck to
the founders’ principle of
flogging expensive sports
casualwear (these days
known as “athleisure”) to the
masses.
It was a marked
difference from the strategy
of his archrival Mike Ashley
who, at Sports Direct, went
for pile-’em-high, sell-’em-
cheap.
While Ashley was selling
last season’s Nikes for £30,JD was cutting deals with
brands to sell exclusive
designs for £100 or more,
reverentially displaying
them in stores pulsing with a
nightclub vibe.
No prizes for guessing
which stockists Nike, Adidas
and others preferred. They
started shunning Ashley’s
operations, irritated at the
tatty way their products
were displayed. When JD
offered top billing to their
exclusive lines, they were
grateful to oblige.
Ashley has since
launched Flannels — a
more upmarket chain
— to win back the big
brands, but the stock
market has decided
which approach it prefers.
Despite falling this year,
JD is still valued at
£6.2 billion compared with
Frasers’ £3.3 billion.appointments in the past year. The result
was that by Wednesday’s crunch vote
Cowgill was short of allies. The only
director to side with him was finance
director Neil Greenhalgh, a colleague
since 2004. Cowgill’s opponents said his
ousting was painful, but necessary.
“It’s a bit like having a baby. You know
at some point it is going to come out and it
is going to be pretty painful but you have
to grit your teeth and do it,” a source said.
Alongside Cowgill’s departure JD
announced that Ashton, a former finance
director at Asos, would step up to be
interim chairman and Kath Smith,
another non-executive director, would
become interim chief executive. Head-
hunters from Spencer Stuart are search-
ing for permanent replacements for both
roles and JD hopes to announce a new
chief executive by the end of June.
Whoever comes next will have a hard
act to follow. Since Cowgill joined in
2004, JD Sports has delivered investors
an 8,023 per cent return compared with a
return of 228 per cent on the FTSE 100,
according to stockbroker AJ Bell. Cowgill,
not a man constrained by modesty, loved
reminding people that JD was awarded
share of the decade and share of the cen-
tury. The biggest beneficiaries have been
the billionaire Rubin family, who paid
£45 million for a 45 per cent stake in
- Today, the family’s 51.9 per cent
stake is worth £3.2 billion.
A reclusive family with an unimpeach-
able reputation and a bulldozing busi-
nessman with a penchant for the pub
always looked an odd marriage. Sources
who know the family believe Cowgill’s
strident behaviour during the pandemic
— when he withheld rent from landlords
and took a £4.3 million bonus — would
not have been welcomed by the Rubins.
After refusing to repay furlough money,
JD’s board is said to have agreed to repay
tens of millions of pounds worth of last
year’s government handouts.
Ultimately, the Rubins sided with the
board and supported Cowgill’s ousting.
“We recognise that now is the right
time for the business to fulfil its future
ambitions under a new governance struc-
ture and new leadership,” the family said
last week.
“These are necessary steps to ensure
the long term, sustainable growth of the
business and that JD embraces the scru-
MAKING THE ALL THE
(WRONG) HEADLINES
at the deal, the Competition and MarketsAuthority (CMA) imposed strict condi-tions. The two sides are not allowed tointegrate their businesses. Footasylum
has to be run independently. “No businesssecrets, know-how, commercially sensi-tive information, intellectual property orany other information of a confidential or
proprietary nature” can pass between thetwo, except where “strictly necessary”.M66, five minutes’ drive from JD’s base Bridge Hall industrial park is just off the
near Bury and 15 minutes from Footasy-lum’s Rochdale HQ. The CMA has launchedan investigation into a possible breach of its
order. All parties vigorously deny any wrongdoing. A source close to Cowgill said they had met in the car park because a nearby café was shut due to Covid and no
business secrets were discussed. The source added that suggestions of wrongdo-ing were a “red herring”. He said the video
had been obtained through surveillance: “Think about the levels to which a compet-itor is prepared to stoop to damage JD.”Last week, the watchdog said it would
block JD’s deal and ordered the FTSE 100giant to sell Footasylum, saying thatotherwise customers would suffer“higher prices, fewer discounts and less
choice of products”. The CMA will over-see the sale process and appchaser. Its announcement prove rovoked athe pur-
furious response from JD. Cowgill saidthe CMA was in a “minority of one” inthinking the deal would hurt competitionand described its decision as “inexplica-
ble”. JD suggested it might appeal, sayingit would “carefully consider its options”.
ATHLEISURE FEVERAs the dominant brands, Nike and Adidasscrupulously control the supply of theirbest products. They engineer huge
excess demand, delivering limited num-bers of trainers to stores in “drops” thatcause hundreds of “sneakerheads” toqueue outside. The scarcity factor means
there is immediate resale value: a typicalpair of Yeezys, a collaboration betweenKanye West, the US rapper, and Adidas,
would retail for £180 and might resell for£300 shortly afterwards. Ann Hebert,Nike’s head of North America, resignedthis year after it emerged her teenage
son, Joe, spent hundreds of thousands ofdollars’ a month on trainers using a creditPeter Cowgill and Siobhan Mawdsley have won plaudits and awards as JD Sports has grown into the biggest player
in the sportswear marketThe black Mercedes S450 parked on anindustrial estate near Bury in GreaterManchester on a drizzly morning in Julydrew no attention from passers-by. But
inside the car were three key figures froman industry whose products excite andobsess young people: trainers.
executive chairman of JD Sports Fashion,the £11.6 billion chain that has becomeBritain’s No 1 sportswear retailer thanksIn the driver’s seat was Peter Cowgill,
to its relationships with Nike and Adidas.In the passenger seat was Barry Bown,boss of JD’s smaller rival Footasylum. Inthe back was Siobhan Mawdsley, JD’s gen-
eral counsel and company secretary.After a few minutes she got out andwalked off, leaving the two men to talk.
backdrop. For over two years, JD had beentrying to justify its takeover of Foot-asylum, announced in March 2019 beforeThis meeting came against a turbulent
running into strong objections from themerger watchdog. When it began lookingChanel don’t
supply your
local paper
shopThe booming footwear market is worth billions. Into this fiercely
competitive space has burst a row over a leaked video. By Oliver ShahKing of trainers’
summit in
a car park
1 JD Sports boss Peter Cowgill, Footasylum’s Barry Bown and JD general counsel Siobhan Mawdsley meet in a Mercedes at Bridge Hall car park near Bury. After an initial chat, Bown stands up as Mawdsley gets out 2 Mawdsley walks away, leaving Cowgill and Bown alone in the carJOEL GOODMANAbrdn gatecrashes £1.5bn
Interactive Investor floatBarry Bown is executive chairman of FootasylumSHY TYCOONS BEHIND JD’S RISE
The financial backers of Peter Cowgill, who has a taste for Bacardi and Coke and says his hobbies are
“blondes and Barbados”, are cut from a very different cloth. The publicity-shy Rubin
family are worth about £6.4 billion and are consistently ranked among the UK’s biggest
taxpayers. Through their Pentland Group, they own brands such as Berghaus
and Speedo, as well as 52 per cent of JD Sports.Stephen Rubin, 83, whose Pentland is chaired by
parents founded the Liverpool Shoe Company with £100 in 1932. His son, Andy, 56, is the deputy
chairman.card in her name for his resale business. Nikes that have sold for $24,000 (£17,780)and more — some originally auctioned offStockX, an online market, lists pairs of
in very small numbers or given out to fam-ily and friends of the company. A pair ofNike Air Ships worn by the Chicago Bullsbasketball star Michael Jordan in 1984 sold
for a record $1.5 million (£1.1 million)through Sotheby’s last month.JD, which styles itself “the undisputed
king of trainers”, has an unofficial motto:“If there’s one person running past thepub in trainers, there will be ten wearingthem inside.” Under Cowgill, it spotted the
athleisure trend early and made itself Nikeand Adidas’s best friend on the high street,polishing its 405 UK stores to a high stan-dard and winning supplies of the best
trainers as the two power brands cut offshipments to weaker retailers. Cowgill, agruff Lancastrian, has said JD negotiateswith Nike and Adidas like other retailers
and that “any brand has a selective distri-bution policy — that’s why Chanel don’tsupply your local paper shop”. But JD’s access to sought-after prod-
ucts has stoked envy among rivals,including Mike Ashley of Sports Direct. InSeptember 2019, after the CMA’s initial
finding that JD’s Footasylum deal waslikely to result in a “worse deal for cus-tomers”, Sports Direct put out an unu-sual statement. It said its lawyers had
advised that the CMA inquiry was likely to“highlight the power of the ‘must-have’brands and potential market-wide prac-
tice aimed at controlling the supply and,ultimately, the pricing of their products”.worth £6.7 billion by 2023, according toThe UK sportswear market is set to be
the regulator. JD is the biggest trainersretailer, with a market share of up to 30per cent. Sports Direct is second, alsowith up to 30 per cent, and Nike third.
Footasylum has about 5 per cent. Shopsales have held up, but online sales aregrowing. Nike, Adidas and other brands
are increasingly selling direct to shoppersvia their websites and mobile apps.WORKING LIKE STINK
Cowgill, 68, started out as an accountantat Cowgill Holloway, whose offices wereabove a barber’s in Bolton. Among his
first clients were JD Sports co-foundersJohn Wardle and David Makin, whoopened their first shop in Bury in 1981.Cowgill, who has said he “worked likestink” at Cowgill Holloway, became anadviser to Wardle and Makin and joined
JD as finance director in 1996. Heresigned after a disagreement in 2001,returning as executive chairman in 2004.In 2005 Stephen Rubin’s Pentland
Group, which owns Speedo, Berghausand Ellesse, bought Wardle and Makin’sremaining 45 per cent stake in JD for
£45 million. Today, Pentland’s holding of52 per cent is worth £6 billion. Cowgillhas won plaudits for building JD into aglobal powerhouse with 3,000 stores and
sales of £6.2 billion, taking over rivalssuch as DTLR and Finish Line in the USalong the way. He is worth about£100 million. Yet he has come under
pressure over JD’s alleged corporatebehaviour in the past few years — and notjust relating to Footasylum.Last December, the CMA opened an
inquiry into JD and others over suspectedprice-fixing of Rangers football shirts. Thewatchdog followed that this year bylaunching an inquiry into JD and Leicester
City over suspected breaches of competi-tion law. JD is unable to comment on thosecases, which are live. Cowgill also raised
eyebrows with a bizarre putative bid forthe collapsed department store Deben-hams last year. JD dropped the move afterits share price slipped on the news.
in the sportswear sector. Ashley, 57, blewthe whistle on a plot to fix the price ofThere is a history of competition abuse
Manchester United shirts in 2000 afterDave Whelan, founder of Wigan-basedJJB Sports, told him: “There’s a club inthe north, son, and you’re not part of it.”
set up by Wardle and Makin after theysold out of JD in 2005. Its chief executive,Clare Nesbitt, is Makin’s daughter. Bown,Footasylum, which has 65 stores, was
its executive chairman, worked as Cow-gill’s right-hand man at JD for 14 yearsuntil 2000. JD swooped on Footasylum
for £90 million in April 2019, after it madea string of profit warnings.companies, Cowgill has been outspokenDespite the close ties between the two
about the CMA’s intervention, telling TheTimes in February last year that itsapproach was “appalling, unjust and
inaccurate”. Whether he keeps up hisvocal opposition remains to be seen.3 Cowgill, left, and Bown keep talking. A source close to them describes any suggestion of wras “nonsense”, saying they discussed a personal matterongdoing after Mawdsley leftAbrdn is in talks to take over the online stockbroker Interactive Investor in a move
that will give the FTSE 100 fund manager greater direct access to consumers and expand its digital capabilities.
said valued II at £1.5 billion, comes amid speculation The deal, which Sky News
about deals in the financial services sector and a boom in mergers and acquisitions.Even though the talks are
under way, II — owned by private equity firm JC Flowers — is also continuing to work on the stock market flotation
that was mooted this year by its chief executive Richard Wilson.
to clinch a deal in the next two weeks. The report of the talks led to an emergency According to Sky, the aim is
announcement by Abrdn, formed by the merger of Standard Life and Aberdeen
Asset Management in 2017. recent media speculation and confirms that it is in “The company notes
discussions with JC Flowers regarding a potential acquisition of Interactive Investor,” Abrdn said.£7.08bn£1.94bn£1.68bn£1.5bnBATTLE OF THE BROKERS: HOW MUCH ARE THEY WORTH?customers pay £9.99 a month to manage Isas and trading accounts.
chief executive, it is a key moment to win support from investors who have suffered a For Stephen Bird, Abrdn’s
near-40 per cent plunge in the share price over the past five years. Bird, a former executive at Citi, took over
last year and had attempted to set out a clear strategy for the enlarged business in three
areas — investment, adviser and personal. At the half year, Abrdn reported a rise in profits of 5 per cent and a
reduction in costs for the first time since the merger.A deal for II would meet his
goal of giving Abrdn access to II’s 400,000 customers and could lead to Abrdn’s funds being sold on the platform.
After unveiling its new brand identity and name in April, it is not yet clear if II would also change its name to Abrdn.
number of changes of ownership since it was set up II has been through a
in 1995 and used different names. It was floated on the stock market in 2000 before being bought by AMP of
Australia and rebranding as Ample in 2002.transaction. An IPO remains an attractive and possible outcome, and discussions
around the process are also under way,” a spokesperson for the company said.II has more than 400,000
customers, making it second in size to Hargreaves Lansdown. Along with AJ Bell, online brokers have
enjoyed a boom in trading by customers at home during Covid-19 lockdowns and
looking for returns in the stock market when interest rates are low. At the half year, II reported a 19 per cent rise
in revenue to £76 million.subscription service where Unlike its rivals it offers athat these discussions will result in a transaction and a “There can be no certainty
further announcement by the company will be made as and when appropriate,” the Scottish-based company said.
by JC Flowers since 2016 and has expanded through a series of acquisitions of its II has been majority owned
own, including of TDDI, Alliance Trust Savings and The Share Centre. In a
statement yesterday, II said it had “attracted interest from a number of parties”. “Discussions with Abrdn
are ongoing, there can be no certainty that these discussions will result in aDubai. It could result in a legal battle. Minor Hotels said there
was “no sales process” for its holding, but added: “We evaluate our position from time to time.” Corbin & King
declined to comment. Corbin opened the Wolseley Jeremy King and Chris
in 2003. They also run Colbert, Fischer’s, Soutine and the Delaunay in Aldwych. They have been in business
for over 40 years, and made their name at restaurants including Le Caprice and The Ivy, before selling them to
Signature Restaurants in 1998. Today the business is run by King, 69, after Corbin
stepped back from day-to-day operations several years ago. year to December 31 2019, In its latest accounts, for the
Corbin & King reported sales of £53 million and underlying earnings of £2.7 million.
Losses before tax were £4.6 million.Corbin & King seeks new backer after row
The restaurant group behind celebrity Piccadilly haunt the Wolseley is hunting for a new backer after falling out with
its biggest investor in a dispute over strategy. owns Brasserie Zédel in Soho Corbin & King, which also
and a string of restaurants, is understood to have been in talks with a potential new investor after disagreeing
with Thai leisure giant Minor Hotels, its majority owner. hotel operators in the Asia Minor, one of the largest
Pacific, in 2017 bought out Graphite Capital , which had backed Corbin & King since- At the time, Minor said it planned to expand the brand in the UK and “key international markets”.
However, it is understood the relationship has soured, with Corbin & King reluctant to
roll-out brands including the Wolseley into regions such as
Sabah MeddingsOil tycoon in £124m green plastics deal
that result from its processes are used in packaging by Unilever and Tupperware.
for its oil and gas joint venture Wintershall Dea, the biggest privately owned LetterOne is best known
company in the sector in Europe. By being private, it is under less public pressure to
transition away from hydrocarbons. However, this year LetterOne launched L1 New Energy to invest in green
energy. The Plastic Energy deal is its first investment.increasingly active in the UK Elsewhere, LetterOne is
investment scene, having recently backed a £1 billion plan by a start-up called Upp
to roll out broadband fibre to one million premises in eastern England. It also owns Holland & Barrett, the health
foods chain.the UK and has plants already Plastic Energy is based in
operating or being built in Spain, France and Holland.Oil billionaire Mikhail Fridman is leading a £124 million investment in a British plastics recycling
company.much of his fortune from a joint venture in Russia with The tycoon, who made
BP, is making the investment through a new division of his LetterOne operation.He is backing Plastic
Energy, which makes use of the 65 per cent of plastic waste that has been unrecyclable due to its composition or
contamination. waste into a Plastic Energy turns the feedstock called
Tacoil that can be used to make new plastic. It is believed that M&G is joining in the investment round, co-
ordinated by Morgan Stanley.key players in the chemicals Plastic Energy works with
industry such as Sabic and ExxonMobil and the plasticsJim ArmitageJill Treanoryear to oCorbin & King reported saCbi&Kiyyear toCorbin & King reported saperaIn its latestIn its latest tiDDecember 31 2019, lons severaaccounts, for thebaccounts for theaccounts, for the31 2019l years ago. dfh,llesles
oearnings of £2.7 million.f £53 million and underlying
binternaintit planbraninternHowever, it is understoodbit prand in the UK and “key nternational markets”. plannanned to expand the d in the UK and “key annwever it is understoodin the UK and “keytiiihdkldk t ”d the hthe
rCorbin & King reluctant tleationshiphas soure , dwitoh
eastern England It alsoeastern England. It also fdhiHolland & Barrett,H ll d&Beastern England. It also foods chainfoods chain.one million ld lpremtt,th h the health ises niowns ownslth
the UK and has plants alreadyPlastic Energy is based inbelieved that M&Gmordinated by Morgan Stanlthe investment round, th ibelieved that M&Gblordinated by Morgan Stanladie new kdhd b Mtpltasc. ti is Itis^ di,joining in joining in s joining inSco-coleyey.
key players in the chemicalsPlastic Energy works withJD’s Peter Cowgill, above left, and Footasylum’s Barry Bown talk in the front seats
of a Mercedes. JD is a big retailer of top Nike and Adidas footwearmerger clearance. These are legitimatetopics. The CMA is fully aware of this andother conversations having taken place.”
met in the car park because a nearby caféwas shut due to Covid and that no busi-A source close to Cowgill said they had
ness secrets were discussed. Cowgill sug-gested the video had been taken onbehalf of a “key competitor”. He said:
“I’m not concerned by the footage interms of any implications of businesswrongdoing or incorrect conduct. But I
tor is able to go to those lengths.”am concerned — very — that a competi-The CMA ordered JD to sell Foot-
asylum last week, after a two-and-a-half-year review. It said allowing JD, which has405 UK stores, to take over Footasylum,options. It could appeal, which wouldlead to an unprecedented fourth reviewof the deal by the CMA.
of the CMA’s enforcement order will crankup pressure on Cowgill, 68, JD’s executiveThe new inquiry into a possible breach
chairman since 2004. He is admired in theCity and the retail industry, and JD hasdelivered a total return of more than
15,000 per cent during his tenure, accord-ing to broker AJ Bell. But there has beengrowing anxiety among some sharehold-
ers over governance at the company — andCowgill’s role as chairman and chief exec-utive. In May, JD’s annual report suggested
it was preparing to separate the two roles,saying that “additional succession plan-ning has occurred throughout the finan-
cial year following concerns relating to thesingle appointment of the executive chair-man”. Cowgill appeared to contradict that
in comments to The Times. He deniedthat he was planning to leaveor hand over some
by JD’s founders in 2005responsibilities.Footasylum was set up
and is run by Bown, chiefexecutive of JD between2000 and 2014. JD
Footasylum. It sealed a deal to buy outing an 8.3 per cent stake inswooped in 2019, buy-
the rest at 82.5p per share the followingmonth — a 77.4 per cent premium to theprevious day’s price. The watchdog
blocked the takeover in 2020. JD success-fully challenged its judgment at the Com-petition Appeal Tribunal, which said the
regulator had not mation. The CMA reconsidered and camedown against the merger again last week.gathered enough infor-
Summit in a car park, page 2 Oliver Shah, page 9 To see the video, go to
thesundaytimes.co.ukwhich has 65,“could lead to asubstantial reduction in
competition”. JD has up to 30 per cent ofthe market for trainers, the CMA says,and gets access to top products from Nike
and Adidas, such as Nike’s £250 Mercu-rial Superfly 8 Elite football boots for menand Adidas’s £120 Originals ZX 2K Boost
2.0 Trail trainers for women. Footasylumhas 5 per cent of the market.The CMA’s verdict provoked a furious
response from Cowgill. He claimed thewatchdog was “in a minority of one” in itsconclusion, which was “inexplicable to
anyone who understands what differ-ence the pandemic has made to UKretail”. JD said it was considering itsThe boss of Britain’s biggest trainersretailer faces questions over his conductthis weekend as the competition watch-
dog is revealed to have launched aninvestigation into a possible breach of itsrules relating to the FTSE 100 giant’s take-
over of smaller rival Footasylum.age showing Peter Cowgill, JD Sports’The Sunday Times has seen video foot-
executive chairman, holding a meetingwith his opposite number at Footasylum,Barry Bown, in a car park near Bury in
Greater Manchester. They were filmedsitting in a black Mercedes at Bridge Hallindustrial park, which is roughly equidis-
tant between JD and Footasylum’s headoffices, on the morning of July 5. In thevideo, they are initially joined by JD’s gen-
eral counsel, Siobhan Mawdsley. She getsout of the car and walks off, leaving Cow-gill and Bown talking in the front seats.
ity has been examining JD’s £90 milliontakeover of Footasylum since it wasThe Competition and Markets Author-
announced in March 2019. The CMA’s ini-tial enforcement order, implemented inMay 2019 and still in place, bans the two
sides from integrating Footasylum into JDor in any way hindering Footasylum fromcompeting with the bigger company.
that “no business secrets, know-how,It does not forbid meetings but saysOLIVER SHAHWatchdog launches inquiry into
trainers chief ’s talks with rival
JD Sports’ Peter Cowgill under pressure as regulator examines meeting in car park
with boss of takeover target Footasylumcommercially sensitive information,
intellectual property or any other infor-mation of a confidential or proprietarynature” can be shared. Exceptions are
“where strictly necessary in the ordinarycourse of business” — for example, if theyneed to comply with accounting obliga-
tions or requests from regulators.sylum, JD and JD’s majority shareholder,Every two weeks, the bosses of Foota-
Pentland Group, have to provide writtenassurances that they have not breachedthe order. Last year, the watchdog fined
JD £300,000 over the closure of a Foot-asylum store in Wolverhampton, whichthe CMA said breached the order. It with-
drew the fine after JD appealed. JDargued the store was closed “without JD’sknowledge or involvement”.
at Bridge Hall. The inquiry is separate tolast year’s penalty notice. The regulatorThe CMA is investigating the meeting
said: “These rules are put in place to pro-tect consumers and other businessesoperating in that market as we investigate
a merger. We take compliance very seri-ously and thoroughly investigate anypotential breaches. Where there is clear
evidence that a breach has occurred, wedo not hesitate to take action.”All parties vigorously deny wrongdo-
ing. JD said: “The brief meeting betweenPeter Cowgill and Barry Bown on July 5was arranged in order to discuss Barry’s
future involvement in the Footasylumbusiness, a personal issue in relation toa family member of Mr. Bown known to
Mr Cowgill, and to reassure JD that Foot-asylum was doing everything it sepa-rately could to assist in obtaining CMABUSINESS
&MONEY
November 7, 2021 · thesundaytimes.co.uk/business thesundaytimes.co.uk/money
NOT JUST A RECOVERY
M&S FINALLY PERKS UP
PAGE 5SAY NO TO NIMBYISM
WIND FARM QUEEN
ANNA
BORGPAGE 8
I’VE A THING FORARMY JACKETS
MIKE GAYLE, AUTHOR
MONEY, PAGE 15thesundaysunTRAINER TACTICS LEFT SPORTS DIRECT TRAILING
Mike Ashley at
Sports Direct went
for a pile-’em-high,
sell-’em-cheap
sales model